Volvo Cars, the premium car maker, has reported a robust 66% increase in operating profit in 2016 to SEK11.0bn (USD 1.24bn) compared to SEK6.62bn (USD 7.45m) in 2015, as global sales hit a new record of 534,332 cars.
Net revenue for the period increased 10% to SEK180.7bn (USD 20.3m) in 2015 compared to SEK164.04bn (USD 18.0m) in 2015 while the operating profit margin improved significantly from 4% in 2015 to 6.1% in 2016.
The results provide the latest proof that Volvo’s ongoing financial and operational transformation is gathering pace. For a third consecutive year, global sales rose to a record of 6.2% with 534,332 cars.
The record 2016 was driven by solid growth in all major sales regions, including double-digit increases in its two largest markets China and the United States and a strong performance in Western Europe. Looking ahead, Volvo is confident that 2017 will be another record year in terms of sales.
Sales of the new top-of-the-line 90 series cars were the main growth driver globally, led by the Volvo XC90 large premium SUV for which sales rose 125 per cent versus 2015, highlighting the success of the company’s new design and engineering direction and boding well for the future as more new models are revealed in coming years.
Meanwhile, the XC60 mid-size premium SUV established another new annual sales record as the nest selling model of 2016 with 161,092 cars in its ninth year on the market, having increased sales every year since it was introduced in 2008. It is followed by the Volvo V40/V40 Cross Country with 101,380 sold cars (106,631). The XC90 was third with 91,522 cars sold (40,621).
Zooming into the Middle East, Volvo Cars improved its position in the premium segment, reporting 14.4% significant and 1,196 units sold while overall industry sales across the region and the premium segment have fallen by 21%.
Emre Karaer, General Manager – Volvo Cars MENA & CIS commented, “The Middle East is a key growth market for premium cars and it represents an important region for Volvo Cars as well. We are optimistic that 2017 will not witness any further drops in sales allowing the industry to recover by 2018.”
More specifically, the XC90 has become Volvo’s main brand driver and best-selling model in the region and followed by XC60. Both models represent 72% total sales of the Small and Medium size SUV segments for Volvo. XC90 and XC60 will drive the brand momentum and position in the SUV segment in 2017, while the S90/V90 in the Sedan/Saloon category will help reconfirm Volvo’s position in the premium D segment.”
V40 and V40 Cross Country in C segment continue to increase Volvo Cars’ presence year over year while S60/V60 remains stable in C&D segments.
“Volvo Cars’ human centric focus is what makes us different from all other car companies, and it is at the heart of everything we create.” Karaer added. “As leaders in safety, electrification and autonomous driving, our aim is to redefine ‘premium’ cars for the future. The company is pursuing both technologies to provide a distinctive and desirable alternative to established premium cars, and believes its credibility in safety will give it a unique proposition.”
Karaer continued, “In fact, last week we announced S90 and V90 achieving top AEB Pedestrian safety ratings from Euro NCAP as a proof of this. Volvo Cars as the first car maker to score a full six points in the Autonomous Emergency Braking for Pedestrians (AEB Pedestrian) test procedure and an overall 5 Star rating from EuroNCAP for both S90 and V90.”
Volvo Cars has been driven to renew its complete product range, powertrain, chassis technologies, safety and connectivity technologies. With the 90 series complete, now the stage is set for new 60 series SPA cars and new smaller 40 series cars on CMA. The new XC60 will be launched in Geneva MS and the car is expected to hit the market by end of 2017.